September 16, 2015
Industrial construction has seen an upswing in Northeast Ohio over the last few years. The vacancy rate of newer buildings is historically low, about two-and-a-half percent, according to Matthew Beesley, principal at Cushman Wakefield | CRESCO Real Estate. "When they get that low, it's typical to see new construction go up. That is the case of what's going on in Northeast Ohio."
With the upswing in new industrial construction come changes in buildings to reflect current trends and anticipate future demands.
In general, the style of warehouses, distribution centers and other industrial buildings remains the same. "Concrete is still concrete," Beesley points out, adding that concrete tilt-up walls are still the preferred material for Class A buildings (those having the finest construction and infrastructure). Many businesses and builders like tilt-up construction for safety, aesthetics and cost concerns.
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August 24, 2015
"The shopping piece is the final piece to round out downtown experience." Rico Pietro
A Panel Discussion
Click To Watch Video
At the turn of the 20th century, lower Euclid Avenue in downtown Cleveland ranked among the largest retail districts in the United States. The growth of suburbs and shopping malls decimated downtown retail and, by the turn of the 21st century, the last of the downtown retail giants had closed.
For the last decade, downtown has become a hub for dining and entertainment. Despite this resurgence, many lament the continued lack of "soft goods" retail stores.
Some experts believe downtown needs a variety of retail offerings in order to thrive. Others argue that there is too much retail in Northeast Ohio already and that brick-and-mortar retail stores are declining, pointing to the collapse of Richmond Town Square, Parmatown Mall, and Severance Town Center. Does downtown need retail to thrive? What efforts are being undertaken to attract national, regional and local retailers?
Join us for a panel discussion on the future of retail in downtown Cleveland.
June 16, 2015
Jim Krivanek and Rico Pietro represented the Developer
By Bob Sandrick, Northeast Ohio Media Group
BEACHWOOD, Ohio -- Vanguard Beachwood, a proposed $36 million luxury apartment complex, would contain a heated pool, fire pits, a dog park and pet spa.
The four-story apartment building -- on the site of the now-closed Bally Total Fitness on Park East Drive -- would also feature a state-of-the-art exercise center, library, coffee and espresso bar, barbeque cabanas with TVs, a pet spa and a heated parking garage below the apartments.
The 210 living units would come with washers and dryers, vinyl plank flooring, energy-efficient appliances, quartz vanity tops, walk-in closets and heated tile bathroom floors. Some apartments would have electric fireplaces.
Covington Realty Partners, which has offices in Chicago and St. Louis, would build Vanguard Beachwood on about 3 acres but needs the city to rezone the land from an "integrated business" district to the relatively new high-end apartment zoning.
On Monday night, council referred the rezoning request to the city's Planning Commission, which will make a recommendation. Council will then schedule a public hearing on the rezoning.
The apartments would stand on the west side of Park East, just south of Chagrin Boulevard and west of I-271.
David Braswell, partner at Covington, told council that his firm would both build the apartments and manage them afterward. He said the site plan is only preliminary.
Braswell said Vanguard Beachwood would contain a mix of one- and two- and possibly three-bedroom apartments. The complex would target married and single professionals ages 25-40.
Braswell said the proposed location is a draw due to the glut of businesses, and employment opportunities, in the area.
Vanguard Beachwood would be Covington's 100th multiple-family community, Braswell said. He added that Covington is now working on East Coast and St. Louis projects. The firm also hopes to start building in Denver this fall.
May 5, 2015
Downtown Cleveland Alliance Highlights Strong Start to 2015 Downtown Cleveland Alliance (DCA) has released the Downtown Cleveland Market Update for the first quarter of 2015. This quarterly update provides an in-depth look at Downtown’s business development through major investments, as well as its office, housing, retail, hospitality and transportation markets.
The report shows that Downtown Cleveland’s retail market is growing at increasing speed. Last quarter alone, nine new businesses opened their doors in Downtown Cleveland, and six more retailers announced their commitment to open Downtown locations this year.
The Q1 market update includes a spotlight on the largest retail location to open in early 2015 – Heinen's Fine Foods located at The 9. After eight weeks of operation, the grocery retailer completed more than 118,000 customer transactions, sold more than 6,000 containers of soup and sold more than 14,000 sport and nutrition bars.
The residential market showed continued strength with an occupancy rate of 97.2 percent. Over the past three years, residential lease rates have risen continually from $1.15 per square foot in Q1 of 2013 to $1.33 per square foot in Q1 2015.
Downtown’s office market is outpacing the market in Cleveland’s suburbs. Lower vacancy in Class A office space and higher lease rates indicate that employers value the power of a Downtown location to recruit and retain talent and for business development.
Additional highlights from the Q1 report include:
An electronic version of the Q1 Downtown Cleveland Market Update is available here.
May 1, 2015
April, 2015 – The mayor of Olmsted Falls, Ann Marie Donegan, is pleased to announce that the city has hired Cushman & Wakefield | CRESCO Real Estate. Alexander L. Russo, SIOR, Senior Vice President, will manage the assignment of marketing several city-owned properties for Re-Development.
Russo said “We are thrilled to be part of this new undertaking in the Falls. We have assigned our top people to this project, which has the potential to dramatically improve the downtown and nearby areas with exciting new activities.” The city has identified a number of properties for lease. “The city has made all the right moves to set up these properties for an attractive adaptive reuse,” said Russo. “There are exciting opportunities for retailers and food & beverage operations there, because of the already-strong activity in the area.”
Cushman & Wakefield / CRESCO Real Estate will be part of the city’s economic development team, along with the planners and volunteer boards. The city planners include George Smerigan and Melissa Schneider. The city of Olmsted Falls has begun the master planning process for the future development.
CRESCO Real Estate is an independently owned and operated member of the Cushman & Wakefield Alliance. Located in Cleveland, Ohio. CRESCO currently employs twenty-three highly skilled real estate professionals, each bringing a strong knowledge of office, industrial, property management, local and national tenant representation, as well as consulting services to the marketplace.
Cushman & Wakefield is the world’s largest privately held real estate services firm. Founded in New York, N.Y., the firm has approximately 250 offices in 60 countries and more than 16,000 employees. For more information visit www.crescorealestate.com.
March 10, 2015
By: Northeast Ohio Media Group Marketing Staff
The commercial real estate market in Cleveland has experienced a complete turnaround since 2011, signaling a new surge in opportunity for businesses looking for property in the area. This remarkable recovery has led to increased property values, rents and out-of-state investments.
The soaring property values of the 2000-2005 period crumbled in early 2006. In the next few years, businesses and landlords throughout the nation faced foreclosure and struggled to protect their assets. Harvard Business Law Review reports that in 2009, the delinquency rate for commercial mortgage-backed securities (CMBS) on commercial properties jumped from less than two percent to more than eight percent in a year, a record high for the industry. The industry had mildly improved by 2011, which boasted a 6.12 percent delinquency rate by year-end. Despite this small upturn, the industry as a whole remained bleak for both the buyer and the seller.
Matthew E. Beesley, SIOR principal at Cushman & Wakefield | CRESCO Real Estate, witnessed these shifting tides firsthand. While there were properties aplenty in the Cleveland area, buyers were scarce. Beesley stated that between 2009 and 2011, it was difficult to arrange a property showing, let alone seal the deal.
"As far as absorption and deal activity go, those three years were among the weakest we've seen historically in decades," Beesley said.
Now, Beesley reports a completely different environment. There is a heightened demand among both buyers hoping to invest in commercial property and buyers hoping to occupy the property. Plus, steadily rising rents and interest rates promise a strong recovery for the entire industry. In addition to the policy changes enacted by the federal government and industry leaders, Beesley posits that an increase in market confidence is doing wonders for commercial real estate.
"The American economy-- and business in general--turned its attitude to look forward with some confidence," Beesley said. "There was no confidence in 2009, '10 and '11 that there was an end in sight to the financial crisis or that business would ever expand again. That turned around. We've gone 180 degrees, three short years later."
According to an industry report issued by the National Association for Industrial and Office Parks (NAIOP), the strong economy is expected to increase demand for industrial property through 2015, and the industry will return to pre-Great Recession levels of growth by 2016. In this healthy market environment, Cleveland, in particular, has experienced impressive growth. Northeast Ohio Real Estate Source estimates that property values will increase between four and five percent and rents will outpace home values by the end of the year.
In addition to thriving at a local level, Cleveland's real estate market is drawing the attention of out-of-state businesses and investors. At Cushman & Wakefield | CRESCO Real Estate, this new trend is particularly indicative of an industry comeback.
"In the past, Cleveland has never been considered a top-tier market from the large out-of-state investment community," Beesley explained. "As of late, we've seen more interest from those folks in real estate. It's not only money from inside NE Ohio that is looking into real estate here. Outside investors are looking more than I can recall in 15 years."
February 6, 2015
By: Northeast Ohio Media Group Marketing Staff
Lately, everyone is talking about Cleveland. Wondering why? The Midwestern town is in the middle of a full-blown cultural and economic renaissance, with new amenities, infrastructures, and properties drawing Millennials to the city. Due to the renewed interest and rapid job creation, it is no surprise that Cleveland has become an attractive option for businesses looking to relocate. So, pay attention to this rising city--it just may be your business' next location.
With the return of LeBron James, basketball superstar and area native, and the announcement that the city will host the 2016 Republican National Convention, the national spotlight is certainly aimed at Cleveland. In fact, at a recent conference, Dave Johnson, marketing director of the Cleveland Convention Center, revealed that the city has been mentioned in the media 200 million times following these major developments.
In addition to these economic drivers, Cleveland has also benefitted from new infrastructures and amenities, which have also attracted a younger professional class to the city.
"The younger workforce wants to have access to an urban environment," explained Rico Pietro, a principal with Cushman & Wakefield | CRESCO Real Estate in Independence. "They want to live the proverbial city life in the Cleveland marketplace." Downtown, this is now certainly possible due to the openings of many new restaurants and shops, efficient public transit, and the overall beautification of the city, including the Public Square redevelopment.
As Millennials flock to the city to begin their new, urban-centered lives, businesses are beginning to take notice as well. As a result, many are now considering Cleveland the ideal location for their regional headquarters.
"Companies--anywhere from the insurance industry to the mortgage and biomedical industries--are looking for young, well-educated talent in order to compete in a more competitive world," stated Pietro. "You need to provide an appealing environment for those workers."
With numerous new office spaces available downtown, Cleveland is certainly not lacking in appealing environments. The recently-opened Victory Center, for example, is conveniently located and contains enough space to accommodate a workforce of up to 1,000 employees.
"Spaces likes these open up opportunities for companies," Pietro explained. These opportunities are backed by numbers, with the Senior Vice President for the Federal Reserve Bank of Cleveland going so far as to state that the city is enjoying a "genuine turnaround."
Although money talks, the economic renaissance is not the only reason that businesses should consider a move. "Getting companies to come take a look at Cleveland is not going to be just based upon how cheap it is to live here," explained Pietro, "but on what the whole qualitative experience of being a member of the downtown Cleveland family of companies entails." Which is something a resurgent Cleveland can now offer.
January 26, 2015
By Michelle Jarboe McFee, The Plain Dealer
CLEVELAND, Ohio -- A $6 million real estate deal that closed Friday bulks up the downtown Cleveland presence of the Millennia Companies, an apartment developer and landlord that - until late last year - had holdings in eight states but no presence in its hometown core.
Real estate records show that a Millennia affiliate purchased the historic Garfield Building, at East Sixth Street and Euclid Avenue, at the end of last week. The Plain Dealer reported in April that Millennia planned to buy the empty office building and transform it into apartments over retail space, contributing to a wave of conversion projects sweeping the central business district.
After months of tweaking its plans, Millennia has settled on 125 apartments - down from the 170 or so smaller dwellings the landlord initially envisioned.
On average, the one- and two-bedroom units will run from 607 to 1,165 square feet and will rent for $1,095 to $2,220 a month, putting them near the higher end - but not at the top - of the downtown market.
Millennia plans to rechristen the building as Corning Place.
Construction on the $40 million project, which also will include 35,000 square feet of lower-level retail and, possibly, offices, is scheduled to start in June. The first apartments will open a year later, with the remainder completed by December 2016.
"We think demand is there for quite a bit of retail," said Nico Bolzan, president of Millennia Housing Capital Ltd., the financing arm of the Valley View-based family of companies. "We could have an office tenant coming in. We could have retail and a restaurant. We have a lot of demand but nothing lined up."
A handful of restaurateurs have inquired about the building, said Rico Pietro of Cushman & Wakefield/Cresco Real Estate, the Independence-based brokerage marketing the retail space. More notably, he added, Cresco is fielding calls from national clothing retailers - chains that wouldn't have looked twice at downtown a few years ago.
Now a larger residential population, of roughly 13,000 people, and a nationwide surge of interest in urban development has made Cleveland a contender, if not a slam dunk, for stores. Pietro wouldn't identify specific tenants who have asked about the 11-story Garfield Building, which features an ornate lobby long occupied by National City Bank.
Cleveland-based National City collapsed during the recent recession and was snapped up by PNC Financial Services Group Inc. in 2008. PNC gradually shifted workers out of the Garfield Building and other leased spaces and into the bank's office tower at East Ninth Street and Euclid.
PNC's lease at the Garfield Building ended in December. That expiration, and the challenges of filling older office space downtown, prompted Westcore Properties of California to sell to Millennia. Westcore unloaded the building for $2 million less than the company paid in 2008, records show.
Millennia plans to use federal and state historic preservation tax credits to assist with the renovations. The project, like other residential developments in Cleveland, also qualifies for property-tax abatement. Bolzan said Millennia has secured 135 nearby parking spaces for tenants through a long-term lease.
Nationally known as a buyer and redeveloper of affordable apartments, Millennia is focusing on full-priced - commonly called market-rate - housing downtown. In September, the company bought 75 Public Square, a historic but outdated office building, for a potential mixed-use redevelopment.
And, with an eye on moving its headquarters and 200 or so jobs from the suburbs to downtown, Millennia continues to evaluate other potential acquisitions. "We are actively looking," Bolzan said in an email Saturday, "but we do not have anything in play at this time."
January 19, 2015
By Michelle Jarboe McFee, The Plain Dealer
CLEVELAND, Ohio -- A piece of Cleveland hospitality history changed hands late last year, in a deal that could bring new tenants -- and, perhaps, more new construction -- to the Flats.
Best known as Sammy's in the Flats, the empty building at 1400 W. 10th St. now belongs to a group led by Cleveland-area investor Joel Scheer. Real estate records show that the buyers paid $1.6 million for the property, which was in foreclosure and controlled by a court-appointed receiver.
Scheer, who has dabbled in industrial and multifamily development, isn't sure what he'll do with the three-story brick structure. But he couldn't resist the location, which overlooks the Cuyahoga River and the future site of Canal Basin Park, an expansive waterfront green space set for completion in mid-2019.
"I went in there ... and it was on a summer day, and you can see guys kayaking," Scheer said of the Sammy's building. "And you go up on the roof and you can see the lake. You can see all the bridges and everything that's going on with [the Flats East Bank] project. And as you look back toward the city, you can see Public Square. I just fell in love with the views."
The Sammy's complex hit the market last year, in the fallout from the abrupt 2013 closure of a notable Cleveland catering and events business. Sammy's in the Flats opened in 1980 as a restaurant, a pioneer in downtown's fine-dining scene. The restaurant closed in April 2000, as owners Denise Fugo and Ralph DiOrio shifted their focus to catering and events.
The West 10th Street building, constructed in the late 1800s and early 1900s, started its life as a picture frame factory. Sammy's, a pioneering downtown restaurant, opened there in 1980 and operated for 20 years.
When Sammy's shut down in August 2013, the company had exclusive catering relationships at 10 locations and had re-entered the restaurant business with a dining spot in downtown's Playhouse Square district.
Court records show that Huntington Bank initiated foreclosure proceedings on the company's Flats complex, its center of operations, the following month.
Fugo could not be reached for comment this week. Steve Skutch, the Toledo-based receiver who handled the sale of Sammy's property including the real estate, did not return a phone call.
Originally a picture frame factory, the Sammy's complex was built in stages in the late 1800s and early 1900s, according to research from Sandvick Architects of Cleveland. The building is part of the Warehouse District historic district, making it eligible for preservation-focused financing tools including federal and state tax credits.
"We think it's a great opportunity," said Tom Yablonsky, executive director of the Historic Warehouse District Development Corp., which helped Sammy's evaluate preservation and development options for the property years ago. "It's a good housing or mixed-use site or restaurant site. ... Even when Sammy's did their assessment of the project, they proposed that they could flank the building with new construction."
Scheer has not decided whether he will seek preservation incentives. He expects to maintain most, if not all, of the existing complex and could pursue new construction on the surrounding land. Working with Dimit Architects, the developer is looking at renovations including patio or deck additions facing the river.
Offices are the most likely use for the 31,000-square-foot building, but other ideas include a boutique hotel, apartments or even some retail, said Rico Pietro of Cushman & Wakefield | CRESCO Real Estate. Bill Saltzman is also part of the current leasing team. Cresco marketed the Sammy's property for sale and is handling leasing for the new owners.
"It's a very prominent building, and I'm sure we're going to attempt to do something very sensitive to the area," Scheer said.
"I never had a site that was so special," he added, explaining his willingness to take on a project without a firm plan or a committed tenant. "You don't get a second chance to buy something like that."
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